Car-hailing apps have become an integrated part of urban life in China. We’ve all used them, after a late night out or just as an excuse to not take the metro, and apparently what we have been doing wasn’t technically legal — until nowish!
China has officially announced the legalization of popular ride-hailing services — from Uber to Didi — and while that might not mean all that much to you, it does mean that drivers will no longer be working in an industry of questionable legality. Still, the legalization does bring a new set of regulations released yesterday, that will take effect on November 1st.
Drivers will be required to have 3 years of experience under the (seat) belt, each car must be equipped with GPS and the car must not be more than 8 years old or hold over 600,000 kilometers on the odometer, whichever comes first.
Currently, workers have mixed feelings about this whole legality thing. While the new rules help to better ensure the safety of riders, drivers’ working hours will be cut; they will only be allowed to drive for a maximum of 8 hours per day. Meanwhile, regular taxi drivers are presumably still free to work 12, 14 or more hour shifts.
This means that ride-hailing app drivers will likely be looking at a loss of income. The New York Times conducted an interview with a driver surnamed Liu who confessed that many drivers have already seen their incomes cut nearly in half recently as Didi Chuxing and Uber have reduced subsidies.
Uber has infamously had a rough go of it in China, losing $1 billion a year — though they are just fine with that — and having their headquarters raided in multiple cities. So the American company was quite surprised that China had decided to officially join the ride-hailing revolution. “Uber called the new rules a ‘historic starting point’ and hailed China for becoming the first major economy to adopt comprehensive nationwide rules on ride-sharing,” reports the Los Angeles Times.
With the ongoing battle between Uber and its domestic competitor Didi Chuxing, the legalization of ride-hailing services means that the companies’ ability to seek outside investments will be amplified in the future.
Currently, Didi is massacring Uber with a 300 million-person client base and a recent $1 billion investment from Apple that it didn’t even really need all that much anyway. Meanwhile, despite billion-dollar losses, Uber is operating in 60 Chinese cities and hopes to expand to 100 by the end of the year.
Both Didi and Uber have welcomed the new regulations, declaring themselves “regulation ready.” So, let the now legal street race begin! Gentlemen, start your engines.
By Robin Winship